Hy Alan
I dont think that greasing the shaft as in the picture would do you any good, when the motor runs, centrifugal force will send the grease flying everywhere. Can you remove the motor and withdraw the shaft, then you can grease the tube useing a small syringe, you can also get a grease nipple that you clamp onto the stern tube, you will still have to withdraw the shaft to drill a small hole into the tube, but it is a relatively easy job. If you have a look at Cornwall Model Boats website , or give them a ring you will see that they supply them.
I would leave a small gap between the motor and coupling, in case of binding, but mainly make sure that the locking nuts on either end of the shaft are locked to the prop on the outside, and to the coupling on the inside.
Cheers
Bosun